Rogue pension advisers target sacked Rolls-Royce workers

Rogue pensions advisers are targeting Rolls-Royce staff being made redundant as part of the struggling engineer’s massive cost-cutting programme.

Workers at the company which is laying off 15pc of its staff - some 9,000 people - are understood to have received cold calls from pensions advisers.

Advice given has included transferring out of Rolls’s generous defined benefit (DB) retirement scheme into private pensions - switches that can rack up hefty charges and are unsuitable for most pensioners.

After being alerted by Rolls to approaches from advisers to affected workers, regulators including the Financial Conduct Authority (FCA), Pensions Regulator and the Money Advice Service are now working with the company and its pension scheme’s trustees to protect affected staff.

In a joint statement they warned Rolls staff “to be vigilant against the risks associated with increased transfer requests as a consequence of redundancies”.

They added they have issued a “data request” to advisers who have worked in transfers out of the Rolls DB scheme, noting that they “believe transferring out of a DB pension scheme is unlikely to be in the best interests of most consumers”.

Advisers were also warned they “should be clear on the FCA's expectations when offering advice to members of the scheme. Where the FCA sees unsuitable advice, or bad practice, it will take action.”

Rolls said it “strongly supported” the FCA’s move to protect members of its “well funded” pension scheme.

The company added it “urged the regulatory authorities to take action where an adviser is found to have been providing unsuitable advice to our people”.

The regulator’s action is hoped to head off a similar scandal around British Steel pensioners, when thousands were targeted by unscrupulous advisers.

Financial advisers targeted the scheme’s 130,000 members two years ago after it was transferred into the Pension Protection Fund from Tata, which had inherited it, to ease financial pressure on the business.

FCA investigations found cases of advisers charging huge commissions to switch steel workers from final-salary pensions into less generous or unsuitable schemes.